Results: Petroreconcavo S.A. Beat Earnings Expectations And Analysts Now Have New Forecasts

A week ago, Petroreconcavo S.A. (BVMF:RECV3) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 5.2% to hit R$786m. Petroreconcavo reported statutory earnings per share (EPS) R$0.42, which was a notable 15% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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After the latest results, the consensus from Petroreconcavo's eleven analysts is for revenues of R$3.16b in 2026, which would reflect a discernible 4.0% decline in revenue compared to the last year of performance. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$3.18b and earnings per share (EPS) of R$2.80 in 2026. So we can see that while the consensus made no real change to its revenue estimates, it also no longer provides an earnings per share estimate. This suggests that revenues are what the market is focusing on after the latest results.

View our latest analysis for Petroreconcavo

There's been no real change to the consensus price target of R$16.76, with Petroreconcavo seemingly executing in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Petroreconcavo analyst has a price target of R$22.00 per share, while the most pessimistic values it at R$13.50. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 3.2% annualised decline to the end of 2026. That is a notable change from historical growth of 26% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.9% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Petroreconcavo is expected to lag the wider industry.

The Bottom Line

The clear take away from these updates is that the analysts made no change to their revenue estimates for next year, with the business apparently performing in line with their models. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at R$16.76, with the latest estimates not enough to have an impact on their price targets.

We have estimates for Petroreconcavo from its eleven analysts out to 2027, and you can see them free on our platform here.

Even so, be aware that Petroreconcavo is showing 1 warning sign in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.